What does a Power of Attorney or Guardianship Have to do with Caring for My Elderly Parents?

Caring for your elderly parents can be hard; but it can be even harder without a good plan.

Part of any plan for helping your aging parents includes a having an experienced lawyer draft a power of attorney, so that your Mom or Dad knows who will direct their affairs, should he or she become incapacitated, by dementia or Alzheimer’s disease or other malady.

The point of a “power of attorney” is to avoid court involvement upon incapacity — whether that incapacity occurs because of dementia, Alzheimer’s disease, or some other reason. It ensures that there is sufficient authority for someone to make financial or health decisions for someone who is — or has become — incapacitated. If you do not have a power of attorney in place for your elderly parents, the next step is to go through a court proceeding called a “guardianship,” where, upon the petition of the would-be guardian, the court appoints someone (the guardian) to make financial or health decisions for the incapacitated person (the alleged disabled person).  A guardianship is more time-consuming and expensive; although, there is the added benefit of court-supervision and involvement to protect the rights of the incapacitated person.

Kathryn Shores and Jeff O’ Kelly are attorneys with Lesser, Lutrey, McGlynn & Howe, LLP, the premier trust and estate law firm in Lake County, Illinois. Most people understand that they need a will but don’t always think about the necessity of powers of attorney. Shores and O’Kelly discussed powers of attorney and guardianship in the context of caring for elderly parents, but also touched upon the fact that these topics are also relevant for anyone over the age of 18, as incapacity also occurs to younger individuals in cases of developmental issues or traumatic injury. In fact, according to Shores and O’Kelly, a power of attorney is valuable for anyone over the age of 18.

What is a power of attorney? It is a legal instrument that names another person or agent who will make decisions for you when and if you are no longer able to do so, or are incapacitated. There are two types of powers of attorney. A power of attorney for property applies to “stuff”; real estate, money, stocks, bonds and digital assets, and who will make decisions for you in regard to your “stuff” if you are no longer able to do so. A power of attorney for healthcare applies to issues regarding where you will live, who will make medical decisions for you while you are alive and what will happen to your body after you die. Both of these powers of attorney apply during a person’s lifetime; unlike a will which only comes into play after the death of a person. A power of attorney for both property and healthcare can avoid intervention by the Court and the expense of guardianship.

Can you write your own power of attorney or should you see an attorney for a power of attorney? The State of Illinois does have “short forms” for both types of powers of attorney; however, they are not short, and the language can be confusing. An attorney can assist you in customizing these forms to fit your particular situation and avoid litigation. (Look at what happened to Ernie Banks!)

Who should you name for your power of attorney? The term is really a misnomer and really should be power of agent. You should name someone who will take the job seriously and is a person you trust to make the best decisions for you. Both attorneys advised that one agent is best and that co-agents are not a good idea as multiple agents may disagree about property matters or medical care. It is however, a good idea to name a back-up agent, in addition to the primary agent. Being the power of attorney or agent, is not to be taken lightly. The agent has a fiduciary duty to the principal; that is the agent must treat the principal’s assets as if they were his or her own and must avoid self-dealing. Additionally, if litigation does develop with a lawsuit being brought against the agent, the agent has the burden and duty to prove that he or she did nothing wrong.

An unfortunate scenario regarding a breach of the agent’s fiduciary duty could develop where one child is the primary caretaker and agent for an elderly mother with dementia. Mom may have given that child some money or gifts for the care that child has provided. A second child, who has no part of the caretaking may find out about such gifts and sue the first child for stealing from Mom. It would be hard for the first child to defend such a charge and show there was no self-dealing as Mom cannot testify as to what she wanted (whether Mom is deceased or incapacitated) and the first child also cannot testify to Mom’s intentions. In such a situation, it would be best for if both Mom (or her estate) and for the first child to have their own attorneys to untangle this sticky situation.

When does a power of attorney become effective? If you are conscious, you will be asked directly about your medical care. If you are unconscious or unable to respond in any meaningful manner, your agent will make that decision. Most healthcare powers of attorney are thought of for elderly people near the ends of their lives. However, dementia is not the only situation where such powers of attorney are needed. Anyone over 18 would benefit from a health care power of attorney in the event of traumatic injury as incapacity can happen to anyone. Having a power of attorney in place avoids court intervention in the event incapacity, whether by injury or dementia, occurs.

A springing power of attorney becomes effective only upon the occurrence of an event. In the case of a power of attorney for property, the agent will not come into the picture until and unless the event of a doctor certifying that the principal is incapacitated and cannot handle his or her own finances. Then the agent can take over handling the property issues of the principal.

When is a guardianship necessary? Guardianship becomes necessary when someone becomes incapacitated but a power of attorney was not previously put into place for that person. Because an agent was not designated by a power of attorney, then the Court can become involved to name someone to become that incapacitated person’s guardian. Guardianship means that there is court supervision and money must be spent to start the guardianship process. Though court involvement and the cost of instituting a guardianship can be seen as a disadvantage, the advantage of a guardianship is the fact that if there are any “bad actors” involved with the alleged disabled person, the Court will be involved and may be able to stop any abuse.

The guardianship process is a formal one that is started with the filing of the Petition for Guardianship with the Court. The petitioner, or the person filing the petition, is asking that the Court appoint them to become the guardian and make decisions for the “alleged disabled person”. As with powers of attorney, these can be for matters of healthcare (guardian of the person) or property (guardian of the estate) or both. The Petition process contains many safeguards for the alleged disabled person so that there are opportunities for the alleged disabled person to be heard by the Court. Besides the Petition itself, a medical report from a licensed physician is required by the Court. Other documents are also filed for the guardianship such as an Oath and Bond as well as an Acceptance. After the Petition and other required documents have been filed and served to the alleged disabled person, a GAL (guardian ad litem) is appointed to the case. The GAL is the eyes and ears of the Court and interviews all individuals associated with the guardianship Petition. The GAL then reports its findings to the Court. Once a Guardian is named, the Court will expect annual reports from the Guardian regarding the disabled person.

Attorneys Shores and O’Kelly closed the interview with two important points regarding powers of attorney. If you are chosen as an agent for a power of attorney, take your job seriously as there is great responsibility and power as an agent. Alternatively, if you are deciding who to choose to be your agent, consider very carefully who will be the best person for the job and who will make the best decisions for you.